EU regulator calls on banks to give priority to clients when using AI

The European Securities and Markets Authority (ESMA) has emphasized the importance of putting clients’ best interests first when using artificial intelligence (AI) in the financial services sector. In a public statement released on May 30, ESMA outlined the guidelines for European Union (EU) financial companies regarding the implementation of AI in their operations. The statement specifically focuses on the impact of AI on the EU’s Markets in Financial Instruments Directive (MiFID) securities law and emphasizes that financial institutions hold full legal responsibility in protecting consumers. While recognizing the potential of AI to enhance efficiency and innovation in retail investment services, ESMA highlights the significant influence AI can have on the behavior of financial institutions and the protection of retail investors. Consequently, it asserts that firms utilizing AI tools, whether developed in-house or by third-party providers, must remain steadfast in their commitment to acting in the best interests of their clients. Notably, this statement is separate from the EU AI Act and solely addresses compliance with MiFID. In addition to AI regulation, the EU has taken proactive measures in other AI-related areas, such as the use of supercomputers to support startups and enhance the region’s AI ecosystem, as well as exploring the integration of blockchain and AI in sectors like healthcare and finance.